Wood fibre prices worldwide have been rising steadily for the past six years, reaching record levels in the second quarter 2008.
Expanding demand for renewable energy may potentially drive prices even higher in many countries in the near future, according to Håkan Ekström, president of Wood Resources International.
“Since 2002, global average prices for pulp wood have risen 67% for softwood and 64% for hardwood, in US dollar terms,” he said in his recently-released world-watch report.
And Australia’s leading independent research, analysis and forecasting service, BIS Shrapnel, said the average annual domestic demand for sawn timber was forecast to increase from 4.8 to 5.6 million cubic metres between 2008 and 2012, plus it was now time to target overseas markets.
BIS Shrapnel report author and senior manager, Bernie Neufeld, said that due to more favourable exchange rates and international conditions expected in 2009, the time was right for Australian sawn timber producers to go after overseas markets.
Ekström said that, to date, most pulpwood had been consumed by the pulp and paper sector, with smaller amounts used to produce wood-based panels such as MDF (medium density fibreboard).
The hot new market for wood fibre is that of biomass energy; demand in both Europe and North America is expected to soar over the next five to 10 years. With the supply of wood fibre relatively inelastic, at least in the short term, this sudden new demand would normally be expected to push wood prices to unprecedented new heights.
However, Ekström pointed out that the availability and cost of ocean transport may restrict international trade in wood fibre to a great extent.
“A lot of new power projects are being developed with the expectation that ‘waste wood’ will be both relatively inexpensive and vessels for transport will be readily available. Both assumptions may prove to be highly optimistic.”
The full article can be found in the October issue of Australian Forests and Timber News.